In a major national security development, the Department of Justice announced charges Tuesday against two Chinese nationals accused of exporting sensitive U.S. microchips to the Chinese Communist Party (CCP). One of the suspects is in the U.S. illegally.
According to the DOJ, 28-year-old Chuan Geng of Pasadena and 28-year-old Shiwei Yang of El Monte, California, were allegedly smuggling advanced AI-grade computer chips to China. Prosecutors say they bypassed federal export laws by mislabeling the shipments and routing them through countries like Singapore and Malaysia—known hotspots for laundering tech to China.
The chips at the center of the scheme were high-end GPUs, or graphic processing units, critical to powering artificial intelligence applications. These are the same chips used in military-grade systems, self-driving cars, medical diagnostics, and more. The U.S. government had already placed strict controls on their export, particularly to countries like China, to prevent national security risks.
Geng is a lawful permanent resident, while Yang overstayed her visa and is in the country illegally. Both have been charged with violating the Export Control Reform Act—a felony that carries a maximum sentence of 20 years in federal prison. Yang is currently in custody awaiting a detention hearing scheduled for August 12, while Geng was released on $250,000 bail after turning himself in.
What’s even more alarming is the sophistication of the operation. The pair allegedly ran the scheme through their California-based company, ALX Solutions Inc., which was created shortly after the Commerce Department introduced new restrictions on AI chip exports. Investigators say the company facilitated at least 21 shipments over nearly three years—many disguised as legal tech components—to ultimately reach Chinese firms.
The investigation revealed that ALX Solutions was receiving significant sums from overseas entities, including a $1 million payment from a Chinese company in January 2024. And when federal agents seized phones during the arrests, they found damning messages between the two suspects, discussing how to evade U.S. export controls and reroute shipments through third-party countries.
One shipment in December 2024 was especially brazen. It was falsely labeled as non-regulated GPUs, but federal officials later confirmed it contained highly restricted AI chips. Neither defendant applied for, nor received, the proper licensing from the U.S. Commerce Department for those exports.
The case is another chilling reminder of how deeply the CCP is embedded in U.S. tech theft. By leveraging legal loopholes, shell companies, and even illegal immigration, hostile foreign actors are systematically siphoning off American innovation.
The DOJ, FBI, and the Department of Commerce’s Bureau of Industry and Security are continuing the investigation. Both suspects are scheduled for arraignment on September 11.
This isn’t an isolated incident—it’s part of a broader pattern of Chinese espionage and economic warfare. While President Trump’s administration has cracked down hard on CCP theft of American intellectual property, the full extent of foreign infiltration into U.S. tech, academia, and defense is still coming to light.
The question is no longer whether China is targeting American technology—but how many more ALX-style schemes are still flying under the radar. With one suspect in the country illegally, this case also reignites concerns over border security and vetting for foreign nationals entering the U.S.
The message from federal officials is clear: America is no longer turning a blind eye to Chinese tech theft. With stiff penalties and aggressive prosecution, the days of quiet infiltration may finally be over.
But as this case shows, the battle to protect American innovation is far from finished.
